CMS Disclaimer: We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact medicare.gov or 1-800-MEDICARE to get information on all of your options.

What is a Medicare Advantage Plan?

It really hit home how frustrating Medicare is to seniors when a gentleman approaching 65 told me that learning Russian was much easier than understanding Medicare Plans. My experience has been that this is particularly true in understanding one’s choices with regard to Medicare Advantage Plans and how they compare to Medicare Supplements.

In the Research Triangle Area we are blessed with many excellent Medicare Advantage plans. With their zero or low premiums, it would be tempting to choose one without even considering the more expensive Medicare Supplements. However, they are not the best choice for all Medicare beneficiaries and there are a number of factors that must be considered before deciding if one of these plans is your best option.

Medicare Advantage Plans are also know as Medicare Health Plans or Part C.  They are managed by Medicare-approved private insurance companies and cover all benefits and services under Part A (which helps cover care in a hospital, skilled nursing facility, hospice or at home) and Part B (which helps cover services from doctors and other hospital providers, outpatient and home health care, some preventative services and durable medical equipment).  Although you can purchase a Medicare Advantage Plan without drug coverage, most have drug coverage (Part D). They often have extra benefits such as vision and dental reimbursements, free gym memberships and an over the counter allowance that you can use to purchase non prescription drugs and other health related products.

Types of Medicare Advantage Plans 

Health Maintenance Organization (HMO) Plans: A Medicare Advantage Plan that provides all Original Medicare Part A and Part B health coverage and often covers Part D prescription drug coverage. They normally on pay for medical care from doctors and hospitals in their provider network (except in emergencies).

Preferred Provider Organization (PPO) Plans: A Medicare Advantage Plan that provides all Original Medicare Part A and Part B coverage and often covers Part D prescription drug coverage. PPO’s have a network of doctors and hospitals, but will pay the cost for you to go to providers outside of their network. However, usually your cost is higher.

Health Maintenance Organization Point-Of- Service (HMO-POS) Plans: This is a type of Medicare Advantage available in a local or regional are that combines the features of and HMO and PPO. It requires a designated in-network primary physician to be the primary health care provider. However,  policy holders can obtain care from hospitals and doctors outside of the provider network and pay a higher amount.

Medicare Special Needs Plan (SPN): A Medicare Advantage Plan that has a benefit package designed for people with special health care needs. Examples of specific groups served are include people who have both Medicare and Medicaid, people who reside in nursing homes and those who have certain chronic medical conditions.

Medicare Medical Savings Account (MSA): MSA plans combine a high deductible health plan with a bank account. The plan deposits money from Medicare into an account for the MSA policy holder. The policy holder can use funds from the bank account to pay for medical expenses until their deductible is met. Since the MSA available in NC covers Medicare Part A and B, but not prescription drugs, one must purchase a separate drug plan.

 

How does a Medicare Advantage Plan(also known as Part C) compare with a Medicare Supplement(also known as a Medigap Policy)?

  1. As the name implies, a Medicare Supplement “supplements” what Original Medicare does not cover. How much is “supplemented” depends on the plan you choose. For people who turned 65 January 1, 2020 or later, plans range from a Plan G which covers what original Medicare does not cover except for an annual Part B deductible of $233 to a High Deductible G which in addition to the Part B deductible has a $2,370  Part A deductible.
  2.  Medicare Advantage Plans normally have much lower premiums than Medicare Supplements. Often their premiums are zero. However, Medicare Advantage plans have co-pays for doctor visits, emergency rooms, surgery, lab tests, physical therapy and many other medical procedures. Their yearly maximum out of pocket can be in the thousands for someone with many medical procedures. The same person with a Medicare Supplement Plan G would only have to pay their Part B deductible, which currently is only $233.
  3. Both Medicare Supplements and Medicare Advantage policies require enrollees to be enrolled in Medicare Part A and B and continue to pay their Medicare B premiums.
  4. Although there are some types of  Medicare Advantage plans that do not include drug coverage, the majority do,  Since Medicare Supplements do not include prescription drug coverage, their enrollees must purchase a separate Medicare Drug Plan. An exception to this is if they have prescription drug coverage from a previous employer or the Veteran’s Administration.
  5. Medicare Supplements allow you to move to another state or county without changing to another policy.  Medicare Advantage Plans are regional. This means if you move to another state or sometimes another county you must enroll in another Medicare Advantage policy.
  6. Medicare Supplements cover the medical expenses of their policy holders with any doctor, healthcare provider or hospital that accepts Medicare patients. Medicare Advantage Policies normally have provider networks that must be used to avoid extra charges or your medical services not being paid by the plan.
  7. Medicare Supplement premiums increase as you get older. All policy holders pay the same premium for a Medicare Advantage policy. Although your premium and benefits can change from year to year, age does not affect your premium.
  8. During Open Enrollment (October 15th through December 7th) each year you can change to a different Medicare Advantage without going through medical underwriting (answering health questions). The plan you choose during this period will go into effect January 1st.
  9. You can change a Medicare Supplement anytime you want. However, unless you have recently enrolled in Medicare Part B or are in a Guaranteed Issue Period because your Medicare Advantage or Supplement was cancelled, you will have to go through medical underwriting. The insurance company can refuse to accept you or charge you more than their quoted rate.  Although there are exceptions, most insurance companies require underwriting if you want to switch to a different Medicare Supplement or from one of their Medicare Advantage plans to one of  their Medicare Supplements. One exception to this is if you have been enrolled in a Medicare Advantage plan for less than one year.
  10. Although some Medicare Supplements do offer benefits such as free or discounted gym memberships as well as discounts on hearing aids or dental services, they normally do not offer the generous benefits offered by Medicare Advantage plans. Many Medicare Advantage plans offer free gym memberships, vision benefits, dental benefits, an over the counter allowance for health related products and some pay for part of your Medicare Part B.
  11. When you are enrolled in a Medicare Supplement, original Medicare decides what procedures are medically necessary. If Medicare pays their portion, the Medicare Supplement must pay their portion. When you enroll in a Medicare Advantage plan you are turning the management of your healthcare over to the Medicare Advantage insurance company that you choose.
  12. Medicare Advantage Policies are regulated by CMS (Centers of Medicare & Medicare) and must adhere to certain guidelines and requirements to maintain their contract. CMS gives them an annual star rating on how well they take care of their clients, with 5 stars being the highest. Part of this rating is based on feedback from policy holders.

 

What questions should you ask before you enroll in a Medicare Advantage Plan?

1. Are my doctors in the plan’s network?   It is important that the doctors you see frequently, such your primary care physician, are in the plan’s network. Although a PPO Medicare Advantage Plan will allow you to go outside the network, you are likely to pay a higher amount.

2. Are the hospitals in my area in the plan’s network?

3. Are my prescription drugs in the plan’s formulary (list of drugs that a drug plan covers) and what is the co-pay for each drug?  Although most Medicare Advantage Plans include a prescription drug plan, their formularies are different. One or two expensive drugs that are not in a plan’s formulary can result in a huge out-of-pocket expenditure.

4. What are the co-pays, costs or co-insurance for hospital stays, physician office visits, diagnostic tests, outpatient surgery, ambulance services and emergency room visits?

5. What is the maximum total out-of-pocket per year? Typically this should include the amount you spend on co-pays for doctor visits and hospital stays as well as the cost of ambulance services or emergency room visits, but would not include your prescription drug cost or co-pays.

6.  Does this plan offer reimbursement for eyewear, dental expenses and hearing aids?

7. Do I receive a gym membership at no cost or a reduced cost?

8. What is the “star rating” for this plan?  The federal government rates Medicare Advantage plans on a scale from one to five stars based on the quality and accessibility of care, consumer satisfaction surveys and other measures. Plans with three or more stars are given bonus government funding.

9. Will this Medicare Advantage plan pay for part of my Medicare Part B? Some Medicare Advantage plans will pay for part of your Medicare Part B premiums.

 Where can North Carolina residents get help choosing a Medicare Advantage Plan?

Government resources include the web site www.medicare.gov, a guide published by the Centers for Medicare & Medicaid Services named Medicare-and-You.2023 and the North Carolina Department of Insurance’s “Seniors’ Health Insurance Program” (SHIIP), which can be contacted via the web at www.ncshiip.com or  phone at 1-855-408-1212.

To save time and avoid aggravation you can contact a health insurance agent who is licensed to sell Medicare policies for numerous companies. This type of agent is called a broker.  Since they are compensated by the companies they represent you pay nothing for their expertise. They can help you sort through your myriad of choices to find the one that fits your needs and budget.